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The cost of European Union regulations for companies means that Britain is better off leaving the single market, one of the country’s most senior business leaders has said.

Lord Bamford, the chairman of JCB and a Conservative peer, said that trade tariffs imposed after Brexit would be a “price worth paying” and that UK businesses will take it “in their stride”.

His vote of confidence came as Britain’s economy expanded by 0.5 per cent in the three months following the EU referendum, defying the “Project Fear” predictions of a recession made by the Treasury ahead of the vote.

Philip Hammond, the Chancellor, said that the official figures show that the UK is in a “position of clear strength” ahead of Brexit negotiations with the EU, which are set to begin early next year.

In a further economic boost, Nissan announced a significant expansion of its Sunderland plant which will now build the new Qashqai and X-Trail models.

The move, which will secure 7,000 jobs, follows repeated warnings that international companies intend to move out of Britain in the wake of the Brexit vote.

Toyota also on Thursday indicated that it will keep producing cars in Britain despite the vote to leave the EU.

Theresa May, the Prime Minister, said: “This vote of confidence shows Britain is open for business and that we remain an outward-looking, world-leading nation.”

John McDonnell, Labour’s shadow chancellor, refused to welcome Nissan’s pledge, describing it as “chaotic” and alleging that the Government has made a “secret” financial deal with the car manufacturer to ensure it does not leave the UK, a claim rejected by Downing Street and ministers.

Speaking on Thursday in Parliament, Lord Bamford, who supported Brexit, dismissed claims made in recent weeks that UK businesses need the country to remain a member of the single market after the UK leaves the EU.

He said that “hidden barriers” to businesses caused by red tape and regulations “proves that this single market has not created a level playing field”.

“I want British business to get behind the Government,” Lord Bamford said. “We need the Government to secure an exit deal that is in Britain’s best interests. A deal that will allow us to become a truly global trading nation. If tariffs are the price we have to pay to leave the EU, well so be it.”

The peer added: “British business people are very adaptable. They adjust very quickly to changes in the trading environment. So rest assured they would take tariffs in their stride. If tariffs are the price we have to pay to secure free trade agreements with the rest of the world, I think it’s a price worth paying.”

His comments come after the emergence of warnings by the Treasury, which have now been disowned by Mrs May’s Government, that quitting the single market could cost Britain as much as £66 billion a year.

The GDP figures released by the Office for National Statistics defied the most pessimistic predictions made by the Remain campaign.

The 0.5 per cent expansion in the three months after Brexit was slower than the 0.7 per cent rate in the previous quarter, but stronger than analysts' estimates of about 0.3 per cent.

The ONS said: “There is little evidence of a pronounced effect in the immediate aftermath of the vote.”

Ahead of the vote George Osborne, the former chancellor, said that Brexit would result in a 0.1 per cent fall in GDP in the third quarter that would herald the start of a recession.

Mr Hammond said: “"We are moving into a period of negotiations with the EU and we are determined to get the very best deals for households and businesses.

"The economy will need to adjust to a new relationship with the EU, but we are well-placed to deal with the challenges and take advantage of the opportunities ahead."

Meanwhile, David Mundell, the Scottish Secretary, appeared to confirm that Britain will leave the single market after Brexit.

In comments that were played down by Number 10, he told Scottish MSPs: “"I accept on one level, if we are leaving the EU the essentially we are leaving the single market but access to the single market can, I think, continue in a way that doesn't involve tariffs or barriers."

It came as a minister was accused by Tory MPs of spreading "gloom" after warning that it is inevitable that food prices will rise after the Brexit vote.

Mark Garnier, the International Trade minister, said increasing costs were a "well predicted effect" and there was "nothing" the government could do.

Jacob Rees-Mogg, a Conservative member of the Treasury select committee, said: "In broad terms there is simply too much gloom around the economic consequences of Brexit. Most of these warnings have not

come through."

Steve Baker, another Tory member of the Treasury select committee, said: "The marmite debacle arose from an unjustifiable attempt to secure across the board price rises.

"I would hope every minister would now talk up our vibrant and dynamic economy and excellent prospects."

"If we do face rising prices I shall blame the Bank of England. The Bank could easily defend the pound by ending QE and reversing the recent rate cut."